tv MONEY With Melissa Francis FOX Business March 23, 2013 12:00am-1:00am EDT
or you could buy back the debt, you could approve you balance sheet like ford motor company debt. instead of taking money from the taxpayers like general motors and enhancing the union and all of that. >> the investor wants to look at dividends. so it helps the yield and stock prices. but thcompanies also, you know, they are too big when they get involved in small things, they don't know what to do. >> it won't move the needle. there are not a lot of
large-scale projects of with these companies to get involved in at this point. >> that is bold and creative thinking. >> i was just thinking that. i mean, we have great companies. real innovative companies popping up. that is what i worry about the u.s. economies. where are those bold innovative companies. and i would make another footnote about the buybacks. yes, record numbers since 2009. but that is because the feds are buying back their own shares. they say let them pass the stress test. they really struggle and diluted earnings per share. diluted their capital base with a lot of shares during the crisis. they have basically flooded the market to recapitalize and buying it back.
the. neil: in cyprus explodes and banks reopened, let's see what happens to the residents of cyprus. people say oh, we are there for you. perhaps is next. that they >>. melissa: i'm melissa francis and here who is made money today. investors that are staying optimistic about cyprus. it is scrambling to win a last minute bailout to avoid collapse right now as we speak. the bulls are betting a deal happens before the monday deadline. the euro is rallying against the u.s. dollar, and, if you owned apple, you made money. a top analt expects the next iphone to arrive this summer. shares rallied 2% closing above the 50-day moving average. that is the first time since october 4th for that stock. look at that. but the big money winners of
the day, anyone who bet on harvard basketball whoo-hoo!. my alma mater won its first ncaa ever, ever. the school has been around since 1636. upse number three seed new mexico. i will cash in with a wager i made with one of my guests this week, if harvard wins anything, if they win a single game, score one point i win. how about that? >> i send you joe's stone crab. shibani: he laughed. did you see him laughing at me! i'm waiting, bruce. most of my family is allergic to stone crabs. i want four steak and cheese sandwiches from pin nokia quotes -- pinnochios on campus. it is always about money and crimson melissa: i'm in a good mood
now, boy. as we headed into the weekend we look what to expect for your money come monday. in cyprus chaos reached a fever pitch. reuters reporting it just passed laws to create a solidarity fund that would pool state assets and give government powers to impose capital controls on banks. the european central banks says cyprus has until monday to raise $7.5 billion or risk financial collapse. banks there have been closed all week and hundreds of demonstrators gathering outside of parliament protesting. it is coming down to the wire. what will this do to the markets. what should you do with your portfolio? with me now is our money power panel. senior fellow at peterson institute. lance roberts, ceo and chief economist with street advisors. pleasure having you there. we're trying to get our third guest all strapped up. i think that was spencer patton. we'll see if we have him in a bit. jacob, let me start wit
you. what do you thk of these latest developments? >> well, i think they're fairly prectable actually. it is very clear that the european central bank has given cyprus an ultimatum. it basically put as gun to your head. unless you come up with a deal that qualifies you for an international financial bailout by monday we're going to blow up your banks. unsurprisingly the cypriots are scrambling. we'll see what they come up with. melissa: lance, what do you think about that, one of the things, this is just one rert that came out a couple minutes ago, that they were talking about potentially instituting that levy on deposits again. they were going to levy deposits bigger than $100,000. that insane idea is back on the table. can you believe it? >> sure. well, n only that, these capital controls are much more nteresting because, basically what they c do is come in and convert demand deposits like checking accounts, into cds.
to keep the money in the bank. melissa: oh. >> thhre is lot of real interesting issues here that may not actually play all that well out in the eurozone because, if it creates panic in other countries that is what we have to worry about. but here's the bigger issue. why is it the ecb just stepping up to help out cyprus? melissa: why? what is the answer? >> it is germany. angela merkel is up for re-election and if she bends over and gives money to cyprus without capital controls she is likely to lose the election in the fall. i was talking about this one of the big risks to resurgence in the eurozone crisis. the guy behind her is against bailouts, period. it could bring the whole euro crisis to a head late this summer. melissa: jacob, go back to the idea what they will do with the money in the banks first before we tackle why the e.u. is getting involved. if they do that, convert deposits into cds so people cat get them out and do these things they will talk about putting this tax on deposits, what happens from there?
what's the fallout? imean that's a big deal? >> well, i think capital controls at this point is inevitable because even if, even if there is a deal, unless you have capital controls, there is going to be a massive is run on these banks the minute they open. but again, i mean we need to look at what is the alternative here? if you don't do the levy over 100,000 euros, you know, you are going to have a risk of the collapsing of all of these banks, in which case, not only the insured but also the uninsured depositers lose much more because the reality is in cyprus, the level of insured depositers is 180% of gdp which means that unless there is a deal, both insured and uninsured deposits basically evaporate. melissa: okay. lance, let's talk about what are the other options. >> sure. melissa: you talk why has the e.u. not gotten involved? is it their best interest to get involved? because if they don't,
doesn't it mean russia sinks their hooks even further into this island nation? they would be the ones to come in and do this bailout. 40% of the deposits are from people outside, mostly russians. >> right. melissa: they are the cayman islands for russia. if russia comes in and bails them out they want a military base there. if the e.u. doesn't get involved they're basically ceding this position to russia. is that dangerous? >> yeah of course, it is. you wouldn't want russians right on your doorstep of the e.u. and this is what this would propose. the other side there are very small oil deposits that are very lucrative rssia is also interested in as well. melissa: natural gas, yes. >> and natural gas. so we could see a potential deal over the weekend to cede those assets to russia in exchange for bailout necessary to close out the ecb loan. there will be real interesting dynamics. these capital controls, don't be deluded by this. there are real ramifications down the road. th could spread to other countries very quickly.
melissa: before we go, i want do ask each of you, what do youhink happens over the weekend? what does it mean for the markets on monday? that is what everybody watching cares about. they're invested in markets. jacob, what do you think happens and what does it meanor our money on monday? >> there will be a deal. the large cypriot banks will be separated into a good and bad bank. there will be a levy over deposits over 100,000. it doesn't do anything to the markets on monday. melissa: no, you think they're flat, up, down? do you at this how think would have been? >> i think marginally, probably marginally up. but in reality not much will happen. melissa:ance, what do you think? what happens over the weekend and what does it mean for markets on monday? >> i agree with your guests here. i think there will be a deal of somesort over t weekend. the best deal for the markets is something else to occur like a russian step in here. that would send markets dramatically higher on monday the whole deal here is still, fed bailouts of the markets. and, as long as we can
bypass any bad things markets will rally. melissa: you think a russian deal would send market higher on monday? why? >> simply it will bypass the capitacontrols. that is the big concern here is the capital controls because that is the thing that spread to other countries. if we bypass that markets will like that better. melissa: good perspective. >> can i interject here? melissa: quickly. >> even if there is russian deals, there will be can at that controls, even if you sell the banks to russians you will have depositer run on the bank. just in that one bank alone you have 17 billion yours rows of deposits somebody will have to backstop and it will not be the russian central bank. melissa: it will be interesting to watch. sound like chaos no matter how you slice it. we have to keep an eye on it. thank you so much. >> my pleasure. melissa: tomorrow marks the third anniversary of obamacare of. you've heard us tell you all the ways the white house says your health care costs are going down. i think it is safe to say
not everyone is sell greating this milestone. get this. the country's biggest insurance carrier, unitedhealth group, said in the "wall street journal" that people yuls for some of their own clients could skyrocket by more than 100%. look at that 116, or more they said. here to help u crunch the numbers, john lacy, vice president of group benefits with boo sard insurance. i thought this was supposed to bring costs down. seems across the board no matter which irns insurance company you look at aetna, blue cross, costs are going up. how is that possible? >> melissa, the one thing that wasn't exactly clear, health care reform actually changed some of the rules for community rating. when they changed those community rating rus, the carriers no clearly when you do that some premiums are going to rise. there is no doubt some of these premiums, for some individuals and small groups will fall. melissa: like who? who will get the benefit? as i read through all this,
all i see is the numbers you're seeing on the screen right there, more premiums go up. who will do better? only people with preexisting conditions? >> for example, if i had a four-person bakery and all of us over 60 years of old, just the four of uu we could see a premium decrease today, i'm sorry in 2014 over today. but if you were to use that same pam compels to a younger- examples to younger workforce they will see an increase, no doubt about it. the community rating rules have changed basically from fiveo one, to three to one. which, --. melissa: hang on. what i think you're saying, tell me if you're wrong, part of obamacare was if you are older you would experience higher premiums. we're not going to discriminate against you. you get to have lower premiums if you have preexisting conditions you will not pay pour more that. >> right. melissa: anyone who would do that or was logical at all knew at time someone who would pay for the people. people who would pay for
them was everyone else! everyone else's health care premiums are going up is that what you're saying right? >> that is correct. the law actually reduced the ability of insurance carriers to discriminate. and it changed the ftors. so when we get into 2014, those factors are going to be based on your statuses as an individual or a family member, your age, what geography you live in. some of the carriers will actually he the ability to move those numbers up and down based on tobacco use. that i different from how we do it today. melissa: so the at time when we said we'll cover more people and we're not going to charge people who use more health care, more money. sound like the cost of the whole thing is going to go up. at that point the white house and people who were for obamacare, said no, we'll have cost savings across the board. >> sure. melissa: there will be more leverage and more people in the system, so we can negotiate better and we'll have tse exchanges. so the cost savings are going to make up for the increases that we would have seen otherwise.
why has that not come true? >> i don't, i think that when you look at, when you look at where we're at in health care today, premium, for last 10 years, we're aging workforce. one of the things that we battle as an insurance agency is, we are not, we're not in same health we were. our poor health in america today, really drive our rates. if you were to ask the number one reason we have rate increase, i would go back and say it is our poor health and lack of preventative care, that sort of thing. that is our typical explanation. just the other thing to elaborate on, your example, ere are some small businesses, and some small business that will, cease to offer coverage, they will go into the exchange format and some of their employees, based on their percentage of poverty level and --. melissa: exchanges get up and running. will we save money when the exchange is up and running?
will that help. >> some individuals who receive subsidy from the government, tey absolutely will. melissa: okay. >> for the people who will not get a subsidy they will not see savings. no question about that. melissa: sounds like everything else in this country, if you get a subsidy you're better off. if you're taxpayer worker like the rest of us you're screwed. we appreciate your time. >> thanks, melissa. i appreciate it. >> before you take the next sip of tapwater, our nation's infrastructure system got a report card and they got a d. yes, a d. don't go anywhere. we have the shocking details you can't afford to miss. more money, coming up. ♪ . ♪
we have civil pipes dating back to the civil war. so we have massive problems. only money can fix this, as usual, here is the national director of the american society of civil engineering. this is really scary to the average person. should we be scared and shocked by this? >> well, the american society of civil engineers comes out with this report card every four years. looking at 16 categories of infrastructure, of which water and infrastructure are of one category. melissa: yes, it is terrible. let's drill down to some of the details. dams earned a grade d.
the average age ofwatr infrastructure is 50 years. is that a problem? >> yes, it is. damsare a problem. very few dam inspectors in each state to take a look these dams. one thing that we have to be worried about are the critical dams. if something happened to them, lo of life could happen downstream of the dam itself. melissa: the great for drinking water improves slightly to a d. does that mean i should not be worried? people talk about how great the tap water is here. if the drinking water is getting a great d comments on but it's not safe to drink?
>> some of those types are over 100 years old. 240,000 water breaks occur in the united states every year. melissa: if you go over a pothole, otherwise they are out of sight out of mind. we have so many water breaks every year. if we had to replace the system, it would cost a trillion dollars. you know, there are a million miles of pipe. it would be $2 trillion. we don't have the money to fix this. how much of a problem is tha? what are we setting ourselves up for? >> right now we are taking a look at it between now and 2020. it looks like we need about $84 billion. about $126 billion in and only 42 billion of that is programmed
to be spent. that is what we really need to do. we should be making that investment in our wastewater systems. if you think about it, that investment of $84 billion would really prevent a loss of 147 billion to businesses. melissa: we are running an enormous deficit, towns and cities and municipalities. what are the other solutions? and we privatize? could we privatize infrastructure somehow? because i don't know where we will come up with the money to fix it. >> when you think about water, it is the users that should be paying for the use of it. there should be a user fee for it. a lot of municipalities have that. but unfortunately, they have not been keeping pace with inflation to provide the repairs that are needed. melissa: it is interesting that the place where we earned the highest grade was aab.
and that have to do with solid waste and thamount that we are recyclg and composting in this country. is that the only bright point. >> there were so many bad grades. but we did see six categories actually go up this time from the 2009 report card. in those areas, there were investment. the listeners can see that report card. melissa: thank you so much for comi on. i feel like i should think of a private solution. now it is time for today's report. cyprus is going to avoid a collapse. they settled 1.5%, 93, 71. the biggest gain in more than a month. it fell to a two-year low.
operators are coming back on great operations. reportedly due to rising u.s. energy supplies and russia will more than triple exports o china to a million barrels of crude a day. coming up, forget jimmy fallon. nothing sells better than a special tax break. the city is closing dozens of schools. more struggling cities looking to follow suit. you cannot afford to miss this because you can never have too much money
melissa: we want to bring you some breaking news. if you owned caterpillar, you are about to make some money. we are just getting breaking news that they won a five-year contract worth up to $633 million to supply equipment to the military, to the pentagon specifically. no sequester there for caterpillar or shareholders. you can see the stock going up. congratulations if you own it. major news and entertainment industry. this one is all about money. the word is that one jimmy fallon replaces jay leno, there will be another big change. new york wants a piece of the action and is going all-out to woo the late night talk show host. what people are rme calling the jimmy fallon tax credit.
josh, welcome to the show. the proposed budget, it says that there is a tax credit for a variety program that might be filmed before a studio audience of at least 200 people, having a budget of at least 300 million or run at least $10 million in capital expenses. well, that would be the "tonight show." >> no, they are talking about the "tonight show." there is no doubt in my mind. melissa: they are offering them a tax credit equal to 30% of the production cost. is that normal and doesn't happen all?
>> it does come unfortunately. it happens mostly in states like new york that have a very high tax burden. as a result, they need to cut out the loopholes and all of the gimmicks. whether it is professional sports teams, entertainment, tax credits, it is ridiculously high. rather than dealing with new new york's tax structure, they have special breaks for special individual's. melissa: i can't decide how i feel. i am always happy when less tax revenue is going to the governments waste. but at the same time, about $420 million in revenue in order to get jimmy fallon here. it is not like they are not going to spend the money. they're going to make it up by charging someone else more tax in order to close the gap. or am i being cynical? >> you are right to point out that this is not a direct
subsidy. that being said, meanwhile people are leaving new york faster than any other state to go to states like florida and texas and have the competitive tax climates for everyone. this should be about what is best for the entire state. low and medium and high income. >> it is good for the state, is not? because it brings however many jobs. they have a 30 million-dollar budget, there are people there. is there an upside to this? >> is good in the context of tax policy. you want the government to take less money out of the private sector. the way to do that is fair tax policy. this is the story. it is jimmy fallon and jay leno. the story that goes unsold by the countless families who we've
new york every year to go to places where they have jobs. >> it could be a good lesson for california that is taxing the industry that, you know, funds everything to death. the entertainment industry. they are taxing the wealthy. more and more people are taking their production to canada and other states. i mean, what is bad news for new york -- is there anyway that california gets the message and lowers their taxes to try to work with people? >> the only way you will see it is a targeted tax credit. that is not a sensible way. the sensible way is to broaden the base. democratic governors are doing the exact opposite. they are raising tax rates and shrinking tax bases. if the government is picking winners and losers, jimmy fallon in hollywood are winners in this case. >> okay. josh, thank you for coming on
melissa: it is friday afternoon. that doesn't mn that you can't think about how to make money on monday. keeping a close eye on the u.s. treasury bonds. investors are squawking to them for their second straight week on yields. investors are racing to the safe haven of things. almost any conversation about education ends up coming down to money. money is the reason behind the latest and largest school closures in our nations history. chicago is closing 54 schools. can you imagine? it's an effort to shore up the billion dollar budget deficit. as shocking as this sounds,
cities are facing similar meesures are in your city could be one of them. could this actually be the best medicine? joining me n is the ceo of the illinois policy institute. >> and the 2010 census, 200,000 africans left and that has been a decades long time. many are declaring that the chicago public school system, which has monopoly control over educational systems is failing. they are leaving. we have these empty scols that have to be closed. melissa: it seems a liitle too easy. some people have been saying that the schools are empty, they are curable schools, is they're
not going to be overcrowding? >> chicago's population is in a long-term decline. we have the lowest population that we have had since 1920. it was built from hundreds of thousands of more people. all over the city there is excess capacity. they are moving these kids out of the schools and giving them a life in schools that have capacity to not overcrowd them. it will save money, but more importantly it is a recognition that chicago has long been failing. this was a restaurant and customers got food poisoning. that is what is going on in the educational system. just one step in the long erm. melissa: i imagine there is a
response. >> there is opposition. it has been vociferous and predictable. the sad part is they are using the kids as an argument. there is a blue-chip panel by the former ceo, frank clark. really he was the leader of putting the solion together. i think the mayor has done the right thing here. they have a billion dollar deficit. the day of reckoning is here. the union is focused on job security for teachers who have monopoly control. i think that is part of its. >> are they going to vote against charter schools and school choice? it sounds like the city found a solution. >> this is an endorsement. what has been happening, parents have been exercising choice by giving the golden ticket to get their charter school in the
city. those who care deeply about their children's future, this is a validation and i think this will be a step to helping the chicago public school systems. melissa: ecd schools in chicago that are sort of empty. i know that detroit has closed re than 130 schools since 2005. washington dc, they recently announced that they have closed the schools. is it something different? >> this is an epidemic of all of urban america. the solution is set. we had it at one time for education. it is failing the children. detroit is a great example of that. they have lost over 100,000 students in the last 10 years, down 67,000 students. that is an indictment. this is going on all over the
melissa: baseball could be america'spastime. but the miami marlins are threatening to sue a pair of season ticket holders are complaining the view from their seats, $25,000 worth, if not obstructed by a new billboard. we have jan leon with us. welcome to the show. we are going to look at the picture of the seats. i i wanted to tell me what happened? what was the difference when you sat on in them before?
>> well, the very first time was 2012 and fast. we had a concrete wall that had a little bit of padding. it was wonderful. i could see everything. the grass going down the infield, a gorgeous view. we had actually picked the seats we were sitting in two years earlier. melissa: now ty have put up that greenwald right there that allows advertisement. if you cupholders. the average person, it doesn't look like it's that big a difference. but if you are sitting down low, it is actually at eye level. for me, it would be at eye
level. >> if i sit down in my seat and i leaned back, the very first time they put that extra signage in front of us, i have lost third-base and i didn't pick up anything until we have the first view of the field between second and third base the one they say that they have offered to move you. of course, you contacted them, they offered to move you to comparable seats. that you rejected thoseseats. was that true? why was that? >> they offered to move us. th did do so. to seats that were still behind the sign. they offered to move us to seats that were further in the outfield. i cannot see where i would want to sit further away from home plate. we paid for front-row seats. we have had front-row seats for
years. every suggestion that they made was not an option that i wanted to accept. >> what you want and i'm? >> we told them give a seats one and two, those are not obstructed views. they said that they serve other season ticket holders first. melissa: now they are suing you for the money for the seats because they say that you haven't paid. and you haven't because you are unhappy. would you be willing to settle for getting your money back? >> we have not paid them. my option is moved me to seats that are comparable to what i have without having my view block. get rid of the sign or just cancel my contract and leave me alone.
melissa: i understand they are threatening to sue you. >> i have two law firms that will represent me free of charge. people are appalled. we have heard from so many fans are mortified as to what is going on. i have heard from the people that say that you don't want to renew. no, we article them back in 2012 that they couldn't fix the problem, we were going to be okay with this. >> that this is what some people are alleging, but it is an interesting battle. when we look at those photos, we certainly understand your point of view. i hope you'll keep us abreast of what happened. i hope you have a good weekend. melissa: thank you. you worked in the news coming usually have more caffeine in your body and blood. you can never have too mu
thank you for joining us. >> thank you. >> thank you for having a. melissa: first up, coffee drinkers beware. it is called death wish. the company says it is the strongest coffee in the world. they will even buy it back from you if you find anything stronger. your bas cup of joe has 320 milligrams of caffeine. this has 660. for that, that flesh is $20 per pound. what do you think? >> it would've been helpful in law school. i would definitely try it. >> this is not a set surgeon general warning. this is their advertising. remember that i crazy eddie back in the 80s? >> i guess we should've all had it on the brakes we could report
properly. [laughter] >> next up, if you are in a march madness pool, you have a better chance of winning the powerball lottery than a perfect bracket for the ncaa tournament. e odds are 9.2. last year's powerball was nearly one and 175 million. what do you think? did either of you do good in bed on harvard? >> i did not bet on harvard, i didn't have a perfect record. but i have almost one my office pool a couple times. >> i know a lot more about it, i have more luck this way. never heard about this number in my life.
i feel a lot better educated. melissa: if you knew something about the ncaa, the chances were 1.1 billion. >> did to do think a lot of people pick harvard? [laughter] >> i have to be honest. if i was filling out a poll, i'm not sure that i would have picked harvard. okay, now i am talking about this grossly inaccurate prediction. did you see this? won ohio prosecutor has had enough. he has filed a criminal indictment against groundhogs are misleading the nation. we got up on a saturday morning